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Friday, April 18, 2008

Karuturi Global to buy Dutch firm Florinex

BANGALORE: Floriculture company Karuturi Global (formerly Karuturi Networks) is expected to complete the acquisition of a Dutch firm this quarter as it seeks to expand its global distribution network. The acquisition of Florinex, with a top line of $500 million, would provide Karuturi access to wholesale and retail customers across 38 countries. “All I can say is that we are keen to expand our distribution strength and are looking various options,” CMD Karuturi Ramakrishna said when asked about the development. The value of the deal could not be ascertained. Florinex is reported to have a network of cold stores, reefer vans and shop-in-shops in some of the major flower-consuming nations such as Japan, the UK, Ukraine and the Czech Republic. Beefing up its distribution network is crucial for Karuturi, which is also stepping up activities in horticulture. With the acquisition of Kenya-based rose producer Sher Agencies, the company has an annual production capacity of over 600 million stems, which is slated to rise to a billion stems in the next few years. Karuturi, which has secured 85,000 acres in Ethiopia for horticulture and sugar production, is also planning to a dedicated air freighter KAIR to supply vegetables to the European market. KAIR is expected to be operational by January, 2009. Horticulture crops such as French beans, runner beans and green peas will be grown on 30,000 acres in Ethiopia. Another 30,000 acres will be earmarked for sugarcane cultivation, production of sugar and ethanol while an oil palm plantation will come up on the rest of the land. Furthermore, Karuturi Global is believed to be in talks with potential investors and could be looking to divest 15%-20% stake in its overseas rose-producing subsidiary Ethiopian Meadows. Karuturi reported a consolidated top line of Rs 401 crore for the year ended March 31, 2008 while net profits stood at Rs 102 crore. The company expects revenue to grow six-fold to Rs 2,500 crore this fiscal with a net profit of Rs 300 crore.